A bill to repeal a new tax on union dues and unreimbursed job expenses has stalled in the Senate, a significant financial blow to many working families and union members.
The bill, sponsored by Democratic Sen. Bob Casey of Pennsylvania, would reverse a little-publicized hike in the 2017 tax bill. Until last year, taxpayers who itemized their return could deduct a portion of their union dues and any other unreimbursed job expenses. That disappeared when Donald Trump signed the “Tax Cuts and Jobs Act” three days before Christmas last year.
In total, in 2014, the most recent year data was available, Americans deducted $90 billion for union dues and miscellaneous job expenses. The savers included hundreds of thousands of IBEW utility, telecommunications and construction members, who will no longer be able to deduct part of the cost of uniforms or expenses incurred when traveling for work.
The total cost of getting rid of that one deduction is close $20 billion a year, according to Matthew Gardner, a senior fellow at the nonpartisan Institute on Taxation and Economic Policy.
To put that in context, ITEP found that the new law cuts taxes on foreign investors by $47 billion annually and the corporate tax rate cut in the bill will reduce the tax bill of just one company, Apple, by nearly $7 billion each year.
“There is a basic inequity in the tax bill that does place union members at a disadvantage relative to companies trying to subvert those unions,” Gardner said.
One of the biggest sources of bias toward corporations and the rich, he said, was that while workers can no longer deduct basic job expenses, corporations can continue to deduct billions of dollars in business expenses.
“That means businesses can deduct the cost of lobbying Congress not to eliminate the business expenses deduction,” he said.
The bill’s supporters argue that an increase in the standard deduction to $10,000 for an individual and $24,000 for married couples filing jointly will make up the difference.
“Maybe that is true for the average tax payer, and maybe it isn’t. We will see. What is certain is this Republican Congress found a way to go after workers,” said Political Department Director Austin Keyser. “Many IBEW members are unique. Hundreds of thousands of members travel to multiple jurisdictions a year to work on sporting events and large projects, including storm recovery. It is concerning that IBEW members may be negatively impacted by this legislation.”
While union dues are no longer deductible, Keyser said, membership dues to join the anti-union Chamber of Commerce still are.
Casey’s bill attempts to right at least part of the inequity. It would bring back the tax deduction for job expenses and union dues and make it available to more people.
Traditionally, only the 30 percent of tax payers who itemized their return could take advantage of the mortgage interest, state and local taxes and job expenses deductions, among others.
But since the tax bill eliminated or capped those deductions, Gardner said he expects less than 10 percent of tax payers will bother itemizing their return this year.
Casey’s bill simply adds a line to the standard 1040 form that 90 percent of American tax payers use so all union members would have access to those deductions, including many who weren’t able to take advantage of it before.
Unfortunately, Keyser said, the bill is stalled in the Finance Committee and unlikely to see any action as long as the Senate Majority leader is Republican Sen. Mitch McConnell of Kentucky.
“McConnell won’t bring this up unless it is five days before the election and it’s politically advantageous for him to do so. And then he’ll try to take credit,” he said. “Capturing the House and Senate and forcing this bill onto President Trump’s desk is the only way we’ll make up for the damage the tax bill did to us.”